DraftKings Sees Opening With Legalized Sports Betting

Written by:
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Published on:
Feb/03/2018

BOSTON (AP) — With its foothold in fantasy sports, DraftKings couldn't bear to sit out another Super Bowl.

So the company branched off from the full-slate, roster-drafting contests that made it a leader in daily fantasy competition and created a single-game contest that will allow its customers to partake in this year's NFL title game.

By next year, the company hopes to be a fan favorite for another way to get in on the Super Bowl action: legal sports betting.
As the U.S. Supreme Court weighs whether to lift a widespread Congressional ban on sports gambling, companies in and around the business are looking for ways to wet their beaks on a potential multibillion dollar windfall.

For Boston-based DraftKings, CEO Jason Robins said, it's an obvious move, and one the company is eager for.

"We're certainly going to go after it," Robins said in an interview with The Associated Press. "I think the Supreme Court — I'm hopeful — will rule that way. You can't really predict what the government will do, but you have to be prepared."

From its social origins of rotisserie baseball-style competitions among co-workers and friends, fantasy sports have blossomed into what the industry's trade organization says is a $7 billion industry. For some fans, the opportunity to win bragging rights over roommates — or straight cash — has even overtaken their loyalties to the teams on the field.

As it grew, daily fantasy drew the attention of state regulators who likened it to gambling and tried to regulate or outright ban it. All but about nine states have come to terms with the contests, in which participants can win money based on the performance of the lineups of professionals they construct on sites like DraftKings and New York-based FanDuel.

And professional leagues that once considered any kind of gambling a threat to their very existence have embraced daily fantasy. "When you have more people participating in a variety of games, it just makes people more interested in sports," Robins said.

But another upheaval could be coming, with the Supreme Court preparing to rule this term on whether a federal law that banned sports betting in all but four states is unconstitutional. If the Professional and Amateur Sports Protection Act is thrown out, other states could join Nevada, Delaware, Montana and Oregon by allowing gambling on sporting events.

Some leagues, notably the NBA and Commissioner Adam Silver, have even been open to legalized sports betting as a way to create new fans — and milk them for revenue.

DraftKings wants in, too.

"Most of the people I know who bet on sports (also) play fantasy, and vice versa. And they're doing it for basically the same reason: It makes sports more interesting," Robins told the AP in a telephone interview as he prepared to head to the Super Bowl to promote the company's new "Showdown" contest.

"Fantasy will continue to grow, and may even be able to grow faster," he said. "So we can't take our eye off the ball. They're both very important products for us to focus on."

Now occupying three floors of a downtown office building, appropriately located near the city's financial district, the tech-heavy Seaport and the TD Garden sports arena, DraftKings is the leading daily fantasy sports company in the world, with 9 million users.

On a tour of the offices earlier this month, DraftKings workers sat at dual-screen terminals, wearing sweatshirts or hats from their own favorite teams while jerseys from endorsed athletes hung on the walls.

Conference rooms are named for local sports stars like Bobby Orr or landmarks like Fenway Park; a kitchen is stocked with snacks and Red Bull. A cardboard cutout of Patriots quarterback Tom Brady stood sentry near a soundproof studio that allows the company to create its own video programming about league news and — more importantly — how it might affect fantasy play.

"Ultimately we consider ourselves an entertainment company. Our goal is to make sports more exciting," Chief Operating Officer Paul Liberman said. "We're constantly exploring. The team looks at what's fun, what are people engaging in."

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